NZD/USD: Bears continue to guard 0.6950 fencing amid risk-off
The NZD/USD pair faded its upside attempts once again near the midpoint of the 0.69 handle and fell sharply on the news that the offshore Yuan jumped above 6.4 for the first time since January 23. The Antipodeans are usually considered as a liquid proxy for China.
The sell-off was also triggered by a renewed bout of risk-aversion that gripped the Asian markets, as the traders react negatively to the political drama unfolding in Italy. However, the losses appear limited amid falling Treasury yields, which make the Kiwi more attractive as an alternative higher-yielding asset.
Also, upbeat Chinese industrial profits growth combined with broad-based US dollar consolidation could offer some relief to the bulls, as the focus shifts towards the US consumer confidence and NZ Financial Stability Report (FSR) for fresh trading impetus.
NZD/USD Technical Levels
Analysts at ANZ noted: “The NZD has been in somewhat tight ranges for a while now anyway as overall market jitters cap the upside and reasonable underlying demand provides support. We don’t see that picture changing today. Support 0.6880 Resistance 0.6980."